two totally diofferent things
saving edits as TIFFs most certainly explains why your edited RAW photos were saved as TIFFs - iPhoto did exaclty what you instructed it to do
Using RAW in external editors is just that - when you use an external editor the RAW is passed to it for editing which means you have to save to the desktop and import a new edited photo to iPhoto - unless you have a good very specific reason to want this I suggest you uncheck both options
With both unchedked you will no longer get TIFFs when photos are edited and when you edit in an external editor you will simply save (not save as) and everything will work easilyh and smoothly
Then I noticed the photo sizes were 640 x 448 (0 KB) verses 3470 x 2431( 3.0 MB) on the jpeg.
This has nothing to do with teh two options in anyway - is is by sending photos as small rather than actual, or large - if you are using Mail there are two places to set this and either can make it small
LN